LONDON: Copper prices fell to one-week lows on Monday as worries about demand were reinforced by weak economic data from top consumer China and high oil prices. Benchmark copper on the London Metal Exchange traded 0.6percent lower at USD13,470 a metric ton in official rings from an earlier low of USD13,394.5 a ton.
It has dropped 5percent since hitting a 3-1/2-month high of USD14,196.50 last week.
Traders said Chinese data had triggered a further unwinding of long positions - bets on higher prices - held by funds and traders. China’s industrial production data rose 4.1percent in April from a year earlier, compared with a 5.7percent rise in March, missing a Reuters poll forecast for 5.9percent growth and marking the slowest growth since July 2023.
Brent crude futures rose more than 1percent to above USD110 a barrel, after a nuclear power plant in the United Arab Emirates came under attack and efforts to end the US-Israeli war on Iran appeared to have stalled.
“That fuelled further speculation that central banks will need to keep tightening monetary policy, which could hurt metals by slowing global growth and crimping demand from manufacturers,” Britannia Global Markets said in a note.
Elsewhere, focus is on aluminium due to disruptions to output from the Middle East, which accounts for 9percent of global supplies. “Aluminium is already in a clear deficit. The market was expected to be short by around 1.5 million tons before the latest Middle East disruption risk,” analysts at Marex said.
“A Strait of Hormuz-related supply shock could remove around 3 million tons of aluminium supply this year, pushing the 2026 shortfall toward roughly 3.3 million tons.” Concerns about supplies created large backwardations, or premiums for nearby aluminium contracts against contracts with longer maturities.
Overall a softer dollar making metals cheaper for holders of other currencies was supporting prices of industrial metals. Three-month aluminium was flat at USD3,563 a ton, zinc rose 0.1percent to USD3,537, lead firmed 0.2percent to USD1,982, tin gained 0.4percent to USD52,550 and nickel slipped 0.2percent to USD18,450.
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